GMR may challenge order scrapping UDF at Hyd airport

Hyderabad, March 14,2014: GMR Hyderabad International Airport Ltd is considering challenging the regulator’s order scrapping the user development fee at Rajiv Gandhi International Airport here, a group official said today.

The order by the Airports Economic Regulatory Authority (AERA) will have a negative impact on the company’s financials, said Siddharth Kapur, chief financial officer of GMR Infrastructure’s airport business.

“We are looking at all options, including high court. There is an option of going to the appellate authority. We are also looking at going to high court. Within 30 days of the order, we will have to appeal,” Kapur told reporters on the sidelines of India Aviation 2014.

The regulator on February 25 issued the order scrapping theUDF from April 1. The fee is being collected at the airport operated by GMR Group.

The order was issued after wide consultations with all stakeholders to determine tariffs in respect of the airport for the five-year period ending March 31, 2016.

Currently, each departing domestic passenger at Hyderabad airport pays Rs 430 as user development fee, while the levy for departing international passengers is Rs 1,700 each.

“It (AERA order) will definitely have a negative impact. We will work out the numbers. It is very difficult to say the numbers at this time. In fact it (the airport) has been making profits for the last three years,” Kapur said. Business Standard